Former Senior Adviser to Obama, Trump Talks About U.S. Policy Toward Latin America

By Aileen Torres-Bennett Uploaded on October 31, 2018

China, Russia, North Korea and the Middle East have consumed the Trump White House, just as they have previous presidencies. But events in Latin America are commanding the administration’s attention as well.

Venezuela is on the verge of a meltdown that has sparked a regional migration crisis. Violence has rocked Nicaragua. Brazilian politics is careening toward the hard right, embracing Trumpian populism and a nostalgia for the military dictatorships of the past. Colombia’s new leadership is facing age-old problems as drug production ramps up and a rebel peace deal falters. Argentina is grappling once again with a currency crisis. Corruption scandals have engulfed entire governments. Poverty and gang violence in the Northern Triangle continue to drive people toward the United States despite the anti-immigrant climate. And Mexico’s new president will have to contend with a U.S. counterpart who still clamors for a wall between the two neighbors despite a recent détente on the trade front.

It’s a tough portfolio for anyone to tackle — let alone someone who has worked for two bosses with polar-opposite views on most of these issues.

Fernando Cutz managed to do just that, and still come out the other side relatively unscathed.

Cutz has the distinction of working for two very different White Houses as a former senior adviser on Latin America to both Presidents Obama and Trump. He was, until recently, senior adviser to former national security adviser H.R. McMaster, who resigned in April.

Now a senior associate at The Cohen Group, Cutz gave his first public remarks on Latin America policy under the Trump administration at the Wilson Center in September.

At the event, he emphasized separating politics from policy. Trump is a showman who is adept at self-promotion and likes to paint himself as a fighter to the point where he antagonizes allies. Yet Cutz said those alliances still hold because of deep foundations and evolving policies that have been in need of updating. Mexico, for example, has had to distance itself from an administration that has repeatedly railed against immigration, while still working with it to preserve the vital economic relationship via the new United States-Mexico-Canada Agreement (USMCA), a reincarnation of NAFTA.

While the deal has calmed the contentious debate over NAFTA, the president will still face a raft of other Latin America-related issues as he embarks on his first trip to the region this month for the G20 leaders summit in Argentina.

At the Wilson Center event, Cutz mostly discussed how Colombia and the U.S. are dealing with the ever-growing problem of narcotics production, as well as the dire state of Venezuela, now a country with a collapsed economy, a dictatorship and fleeing citizens.

Cutz said the administration had developed plans for a full oil embargo against Venezuela but did not implement it because of the effects it would have on ordinary citizens and the uncertain aftermath.

“Can we guarantee that they will suffer for a very short period, and then we’ll fix everything and bring prosperity? No, we can’t. Will the United States be solely on the hook to fix Venezuela if we do that? Yes, absolutely, because then everybody in the region, everybody in Venezuela, will point to the United States and say, ‘This is your mess,’” Cutz said.

He even revealed that the White House prepared an “escalation plan” for Venezuela depending on how badly the situation deteriorated. He said a takeover of the U.S. Embassy or the killing of 1,000 Venezuelan civilians by the government, for example, could trigger U.S. military action.

The remarks were all the more extraordinary in light of a bombshell New York Times report on Sept. 8 that the administration allegedly held secret meetings with Venezuelan military officers to discuss the prospect of ousting President Nicolás Maduro.

Officially, the White House would only comment on the importance of engaging in “dialogue with all Venezuelans who demonstrate a desire for democracy.” Cutz echoed that line in his Wilson Center talk.

“I think it would have been … irresponsible of us to have senior members of the Venezuelan military approach us saying, ‘Hey, I want to talk,’ and for us to say, ‘No, no, no, we’re not going to talk to you.’ We listen. That’s all we do,” he said, adding that the White House “never debated supporting a coup.”

But the mere fact that a U.S. administration was willing to hold clandestine talks with coup plotters — who have checkered human rights records themselves — was widely criticized given America’s notorious legacy of fomenting unrest in Latin America and supporting right-wing military regimes.

While Cutz opposes unilateral U.S. military action in Venezuela, he doesn’t rule out a regional intervention. He says that might be the “least bloody” option to kick Maduro out compared to a coup or a revolution.

Despite his hardline stance on Venezuela, Cutz seems to take a level-headed approach to U.S. policies in Latin America, keeping an open mind as he transitioned to a starkly different White House — even when it meant rolling back policies he pushed under his former boss.

The Washington Diplomat spoke with Cutz after his Wilson Center appearance to talk about life under two contrasting administrations and to glean his insights into Venezuela and U.S. relations with other countries in the region, including Colombia, Cuba and Mexico.

The Washington Diplomat:You served under Obama. What made you decide to serve under Trump?

Fernando Cutz: I had done a couple tours under the NSC [National Security Council] under Obama, and once President Trump was elected, I was surprised to be invited back to NSC to be director for South America. But once I got that call — the Obama team summoned me back with the blessing of the Trump transition team — I thought about it quite a bit and I thought the best thing to do would be to serve and do so for as long as I could and as long as I was comfortable and wasn’t asked to do anything I fundamentally disagree with. I served for almost a year and a half and left voluntarily at the end of my time. I was never put in a compromising situation of my morals or values. So it became an interesting experience and an honor to serve two presidents.

The Diplomat:What did you feel you were able to accomplish under Obama? Under Trump?

Cutz: I had very different responsibilities. Under Obama, my first time was 10 months into being in the U.S. government and 10 months out of grad school, and I was very young and inexperienced. I was an assistant in the Office of Global Engagement. A very interesting series of things happened [including a] government shutdown in 2013. I ended up serving for a bit as the adviser to deputy national security adviser Ben Rhodes at the time. It gave me incredible insight into the West Wing and how government operates. It was an incredible, fascinating experience. I then went back to USAID.

I was called back in 2015 to work on President Obama’s remarkable, historic trip to Cuba. It was a real honor to be a part of that. I learned a lot about negotiation and interagency dialogue and rapport.

Then I went back under Trump, first as director of South America, mostly focused on Venezuela. We started to go down the path of sanctions that we had been more cautious to do under Obama. We went after some really bad people. We hit Vice President Tareck El Aissami with sanctions. He had over $600 million in the U.S. alone. Meanwhile, people were dying in the streets of hunger and lack of supplies. This regime is corrupt. It was sad but gratifying that we were able to get him.

My senior director was let go early on, so I became acting director for Western Hemisphere affairs. It was rapid steps up. I got to see the whole hemisphere. We began with new NAFTA negotiations [and] Cuba. I had to work on undoing some of what I had done under Obama. We did not go back to pre-Obama. We tweaked Obama’s approach to Cuba and worked on everything else in between.

In September 2017, Gen. McMaster’s senior adviser left and McMaster asked me to be his senior adviser. That was my final role [at the White House]. I got a global, incredible view of things, starting from the PDB, the presidential daily briefing, and moving to a different topic every hour, going from North Korea to Syria to Venezuela to Cuba.

The Diplomat:What made you decide to leave the White House?

Cutz: I resigned the same day as Gen. McMaster did. I thought with John Bolton coming on board, who represented a very different approach on everything, I thought it would be a disservice to stay on not fully embracing his views and vision for the NSC and broader U.S. foreign policy.

The Diplomat:I’d like to get your thoughts on NAFTA. It’s now been replaced withUSMCA. How do you think that changes the relationship between the threecountries overall and trade-wise?

The president might have done some political showmanship there. In reality, it’s a NAFTA 2.0. It’s more a tweaked NAFTA that we’ve improved and broadened to the 21st century. There was broad agreement in all three countries that we needed to update NAFTA. The agreement was static. It pre-dates the internet. [USMCA] was able to modernize the agreement in a way that few trade agreements exist right now — digital trade, e-commerce, etc. It’s the missing piece that allows us to have this document be more representative of where the three countries are. The agreement is a 16-year agreement. That’s a good thing because having a six-year review point [allows] for it to be modernized in positive ways. Who knows six or 12 years from now what we’ll have that we can’t predict? It’s important to make this a living document.

I think our relations with Mexico and Canada will hopefully improve. The president’s approach is to be publicly tough to try to get a better deal. Now we’ll hopefully have a thaw in the tensions.

The Diplomat:Do you think the legislatures of the U.S., Canada and Mexico willapprove this new trade agreement?

Cutz: I do. I think the Mexicans, the Canadians and the American Congress will understand that this is very much in the interest of all three economies. If you reject it, what’s your backup plan? This is way too important for all three economies — trade, jobs, the movement of goods. It is the largest interconnected economy in the world — over $3 trillion. There are strong political costs to reject it.

The Diplomat:You gave a recent talk on Latin America policy under the Trumpadministration at the Wilson Center. I’d like to touch on somehighlights. First, Venezuela is practically a failed state. How did it devolve to thispoint, and what can be done to turn things around?

Cutz: Unfortunately, it’s just been bad human management. There haven’t been natural disasters of any kind or unforeseen wars or economic shocks. Just bad management. It started under Hugo Chávez. He was this very strong populist socialist, believed in giving things away to anyone and everyone. He would give oil like it was free to many, many countries, including parts of the U.S., to buy goodwill among governments and people. It served its intended interests at the time, but it was never sustainable for the economy.

Populist socialism took a severe chunk of the growing capacity and the economy. Venezuela’s GDP is 90 to 92 percent reliant on oil. That’s a very dangerous place to be in. Not to realize that danger and create padding or a rainy day fund and to irresponsibly spend more than they have, that led to catastrophe. So when Chávez went and Maduro took over and the oil markets took a turn, the inevitable happened. It was not a surprise to anyone, with the situation being as horrible as it is. Maduro realized he wouldn’t win elections any more, so he took dictatorship. He won’t allow elections or the national assembly to convene.

We’ve tried a few things. There’s not a whole lot left. We’ve sanctioned a lot of folks. We’re trying to get that inner circle of Maduro to fracture a bit. Early on, we were discussing off-ramps, exit strategies for Maduro — he could go to Cuba or somewhere else. We’ve always wanted democracy and free and fair elections to let the people decide. We’re past giving Maduro that luxury. The people of Venezuela will not forgive him any more. The humanitarian disaster is too grave.

We have a million Venezuelan migrants in Colombia. What’s going to happen when there are 2, 3, 4, 5 million migrants in Colombia? There are severely limited options of response.

A regional military response is not a good option, but it’s the best of the bad options we have left. To not do anything is a policy decision. The consequences are too drastic. Time has passed for a decision to be made. Nondecision is a decision. It’s what we did in Syria and Rwanda. In both of those cases, we regret our inaction as a country and the world. [Those who oppose multilateral military intervention] need to say it out loud and propose a solution. A unilateral military response from the U.S. would be a mistake. This is a regional problem, and it requires a regional solution.

The Diplomat:Coca cultivation continues in Colombia. What approach do you think theU.S. should take to combat the drug problem?

Cutz: President Trump has taken a very tough line on coca in Colombia. It’s grown to a level that is almost out of control. We’re in record-breaking numbers. There is no indication of slowing down. The Colombians realize that’s a problem.

Our partnership with Colombia is very deep, thorough and honest. It is one of our closest allies in the region and the world. We need to work together on coca numbers with a sense of urgency. President [Iván] Duque has been working on that.

The Diplomat:On Duque, what do you think hisbeing Colombia’s new president means for the country in the wake of the FARC peaceagreement?

Cutz: Generally, things will stay the same. I don’t foresee Duque pulling out of the agreement. I don’t think FARC will pull out. For the good of the country, it needs to stay in place. If new challenges appear — maybe not FARC [but] a variant of frustrated rebels who go into the wild — I think President Duque will handle it with a strong hand. I expect the peace process to hold.

The Diplomat:There is a migration crisis in the U.S., according to the Trumpadministration. Trump thinks, for instance, that too many people fromMexico and Central America are being allowed into the U.S. What isyour view of the situation?

Cutz: We need to be very cautious in how we handle this. Having mass uncontrolled migration into any country is a serious problem. We need to make sure we’re cautious about who enters our country. Folks who legitimately waited in line should get their turn.

From a humanitarian perspective, we should be compassionate about those fleeing very bad situations, harsh economic situations, true violence back at home. Many of these folks were targeted or lost family. There’s gang violence. We have to understand why people are making this journey. It’s dangerous. They’re not doing it for fun.

If we want to be effective, that’s going to be through investments we can make in the region. Most migrants are coming from the Northern Triangle, which is what we call El Salvador, Honduras and Guatemala. Under President Obama, through [Vice President] Joe Biden, $1 billion in humanitarian aid was [distributed via] USAID to Central America. We were able to create better security for folks on the ground. We created camps and provided food, water and shelter [that enabled would-be migrants to] stay in their country. It’s a much cheaper initiative than building a wall. It’s an approach we know works.

If we continue to improve our relationship with Mexico, we can work with Mexico to secure the southern border. An effective patrolling of that area [is] a much more cost-efficient way. Keep migrants from entering in the first place. This would lead to a better, more humanitarian-friendly outlook from the U.S. that is compassionate and helps our perspective.

The Mexicans have traditionally been very, very helpful to us when it comes to national security. They are our true neighbors and partners beyond the southern border issue.

We need to have a strong, positive relationship with the Canadians and the Mexicans. They’re our two neighbors.

The Diplomat:What do you think Trump should focus on in Latin America for theremainder of his term?

Cutz: There will be big opportunities in Brazil, given the elections. All signs point to [Jair] Bolsonaro likely winning the presidency in the second round. On the economic front, there will be big opportunities. Bolsonaro has been very pro-U.S. There’s a personal side. He likes Trump a lot. There’s the policy side. If his economic adviser — a University of Chicago graduate, open-market type of guy — if he really has the sway in that administration economically, Brazil can make positive policy changes that will lead to positive economic ties with the U.S. and around the world.

[Former President Michel] Temer was starting to do it but wasn’t able to finish. Ninety percent of Brazil’s national budget pays public sector debt — federal employees and retirement pensions. There’s very little money left over. It needs very significant reform that allows the government to invest in the country. There is potential there to shift that relationship and make it a strong one [with the U.S.].

The Diplomat:Anything you want to add?

Cutz: We have a great relationship with Argentina, too. President [Mauricio] Macri has been doing the right things. He’s having a tough time getting the economy off the ground, but he’s taking the rights steps to bring that economy back to life, and helping him throughout that process is important for us to do as friends and partners. It’s in our interest to have Argentina move in the right direction and not move into darker days of the past. We need to continue our support.

About the Author

Aileen Torres-Bennett is a contributing writer for The Washington Diplomat.